The United Nations International Fund for Agricultural Development (IFAD) is a specialised multilateral organisation of the United Nations. It is based in Rome and dedicated to eradicating rural poverty in developing countries.

Seventy-five per cent of the world's poorest people—1.4 billion women, children and men—live in rural areas and depend on agriculture and related activities for their livelihoods. IFAD projects help poor rural people improve their food security and nutrition, raise their incomes and increase their access to financial services, markets, technology, land and other natural resources.

Around the world, IFAD is a valued international development partner. It has an ongoing portfolio valued at US$10.3 billion (inclusive of cofinancing). With the funding replenishments made in 2011, it has a target of lifting 80 million people out of poverty between 2013 and 2015.

IFAD focuses on:

agricultural production and productivity;

rural finance;

support for women and indigenous peoples; and

building institutions.

Australia was a founding member of IFAD but in 2004 Australia decided to withdraw as a member due to a misalignment with the then government's geographical and sectoral development priorities, as well as internal governance issues. Australia's withdrawal came into effect in 2007.

Since Australia left the fund, IFAD has gone through a major reform, making it a highly regarded development partner by donor countries around the world and by the developing countries in which it works.

It is now timely that Australia renews its membership of IFAD.

Australia's membership of IFAD will:

complement and strengthen Australia's existing support for food security, rural development and poverty reduction;

provide for direct engagement with smallholder producers who are disproportionately represented among the poor and vulnerable—consistent with the fundamental purpose of the Australian aid program of helping people overcome poverty;

address poverty issues in rural areas where IFAD is focused and where Australia has an interest but limited current engagement;

offer in-depth country and technical knowledge in regions and sectors where Australia wishes to expand but lacks expertise; and

offer expertise and experience in rural development in fragile and conflict affected areas where Australia has a strategic interest but may not be able to directly engage.

Reasoning

Importance of food security/needs of the poor

We cannot overestimate the critical importance of food security to every human being—the physical and economic access to sufficient, safe and nutritious food is surely a fundamental human right.

But tragically, for nearly a billion people in the world, this is not the case.

The United Nation's Food and Agriculture Organization estimates that nearly one billion people go hungry every day. Two-thirds of these people live in the Asia-Pacific region. They are our neighbours.

In Sub-Saharan Africa almost one in three people suffer from chronic hunger.

Climate change, drought, conflict, and lack of resources and land to grow food all shape this gross inequality.

The impact of these challenges is compounded by the high cost of food, higher even than the 2008 levels when the food crisis was at its peak.

We can attribute the high cost of food largely to the failure of global food production to keep pace with growing demand. Population growth, income growth, changing diets and climatic variability are just some of the critical factors in this trend.

Forecasts by the United Nations and World Bank indicate that this trend of high food prices is likely to continue for at least the next 10 years.

The magnitude of this challenge cannot be underestimated.

The world is asking why we didn't foresee the current food crises in the Horn of Africa or the Sahel earlier. We did. It isn't a matter of foreseeing; it's a matter of doing something about it.

Australia's approach to food security

Australia has long been at the forefront of global efforts to improve food security. We as a nation are very fortunate to enjoy food security ourselves.

At the same time we have had to grapple with issues like climate, water management and natural disasters that plague less food secure nations. And as a wealthy country, we developed world-class research and expertise in these issues. This is something we can share.

Food security is integral to Australia's aid program.

Our approach to food security focuses on:

lifting agricultural productivity through agricultural research and development;

improving rural livelihoods by strengthening markets and market access; and

building community resilience with social protection programs.

These three elements will together increase the food available in markets and poor households, and increase the incomes and employment opportunities of poor men and women.

Right now Australia is:

responding to the emergency food needs of people in the Horn of Africa and the Sahel;

increasing funding for rural development; and

pursuing trade policy reforms to open up markets and allow more free and fair access to food.

IFAD's approach to food security marries with our own. As I have said, IFAD is dedicated to enabling poor rural people to improve their access to food and nutrition , increase their incomes and strengthen their resilience.

IFAD also works in regions of importance to Australia, including Asia, the Pacific, Sub-Saharan Africa and North Africa.

Developing countries value IFAD's work.

This was made clear during the most recent replenishment of the fund in 2011—Argentina increased its pledge by 300 per cent, Indonesia by 100 per cent, Brazil by 25 per cent and India by 20 per cent—all during a time of economic hardship.

IFAD has reformed its organisational structure to increase efficiency, align human and financial resources with strategic objectives, and expand its role as a knowledge institution.

For every $1 contributed, IFAD mobilises another $6 for rural development.

AusAID's 2011 review of IFAD

In 2011, AusAID conducted a review of IFAD. We found that IFAD had implemented significant reforms and that it was now considered by donors and developing countries to be an increasingly effective, results-focused, value-for-money partner.

The review recognised IFAD's clear mandate to reduce rural poverty and hunger through working with smallholder farmers who are disproportionately represented amongst the poor, vulnerable and food insecure.

IFAD projects currently work with more than 36 million poor men and women, supporting them to become food secure through increasing productivity, access to markets including microfinance, and business development.

Australia's national interest

Renewing our membership of IFAD is clearly in Australia's national interest. It will allow Australia to expand existing support for food security and help the world's most vulnerable to fight hunger.

IFAD's senior management values Australia's unique technical expertise in tropical and dryland farming, fisheries, biosecurity and quarantine. We are considered to have attractive policy and regulatory approaches in these areas.

Membership will also allow Australia to draw on IFAD's considerable experience to strengthen Australia's own approach to food security and rural development in our aid program.

continued commitment to reform to improve governance and management of the organisation, including strengthened focus on results and value for money; and

ensuring disability inclusiveness and gender equality across all of IFAD's programs.

Investment in IFAD would not detract from existing support for food security programs. Financial contributions to IFAD will be decided through the Australian government's annual budget process. The 2011 review of IFAD conducted in-depth analysis of alternative additional food security funding mechanisms, and found that re-joining IFAD would be the best option for additional Australian support in this sector.

Finally, membership of IFAD would allow Australian firms and individuals to be engaged with or employed on IFAD projects. Only citizens of member states can work on IFAD projects.

With the increasing urgency of our global food security challenges and obligations, this bill to enable Australia to re-join IFAD will have considerable benefit for not only our national interest, but for the billions of people world-wide who remain acutely vulnerable to food shortages, and whose lives would be immeasurably improved if they could achieve the basic human right to food security.